Bottom Right Default
State Name: Washington
State Name underscore: Washington
State Name dash: Washington
State Name lower underscore: washington
State Name lower dash: washington
State Name lower: washington
State Abbreviation: WA
State Abbreviation Lower: wa

If you've been following the MBS Commentary, you know what a big deal this afternoon could be. Markets have been preparing for it for weeks and MBS Live members have been on top of those movements every step of the way.

This afternoon, when markets are convulsing mere milliseconds after the Fed Announcement, MBS Live members will know what's going on before anyone else. The accuracy and speed of our real-time price stream and alerts is unmatched.

In several ways Wednesday's session was quite similar to Tuesday's. European and Asian markets coaxed Treasury yields lower overnight. MBS opened several ticks into positive territory, but lagged Treasury gains (ultimately firming up into mid-day weakness). The morning was uneventful, with little attention paid to data, events, or Fed speakers. Rather, bond markets generally traced out lower magnitude moves of equities markets, leveling off in the afternoon and briefly pushing back against the weakness heading into 1PM. But whereas yesterday provided a rather sharp drop-off for MBS prices between 2-4pm, today has seen them do more to hold their ground and level off. This has more to do with stocks stalling out and Treasuries holding their own ground than any sort of organic strength in MBS. All of the opportunistic "spread tightening" took place in the morning hours.

MBS Pricing Snapshot

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.

Overall the day's trading range is still quite narrow (6 ticks) and lenders are generally out a bit weaker than yesterday (if they didn't reprice), so there doesn't seem to be an overwhelming need for negative reprices at the moment. That said, we just hit the lows of the day with Fannie 3.0's briefly hitting 104-11 and now getting a quick bounce back to 104-12. This could have a few of the "early crowd" lenders considering a reprice--most likely with next sustained move down by 1-2 ticks.

Jason Adams : "Where do you see markets in a couple of years? I don't see enough purchase business to keep all originators feed. If we have higher rates and no value, we have no more rate and terms or cash out refis."

Matthew Graham : "Yes, it still holds up. Secondary market appreciates predictability of cash-flows and frowns upon any attempt to forcibly change that predictability. It has a net-negative impact on prices if it happens. Yes TM, because of prepayment. If something with a price over PAR pays off faster than expected, investor loses money, servicers lose money. "

David Z. : "Hi MG, is the Fed not still the main MBS investor? So does that really hold up anymore?"

Matthew Graham : "Congress could change the date, but they couldn't force lenders to participate. Some might, but it has a net-negative effect on rates. Pick your poison."

Matthew Graham : "eligibility date reminds me of the last time the convo came up in chat. "Gaius Rossini (10/24/12 9:07AM): the current date is something of a covenant between the fhfa and mbs investors.""

David Z. : "I did it Tom, the acct set up is super simple. Telling everyone I can about it"

Bryce Schetselaar : "If they didn't make you set up an account, there would probably be more"

Dustin McAlister : "va high seem to be stopping at about 1 in rebate here on 3.25"

Michael Gannon : "Va high balance get hammered over here pretty good"

Tim Mitchell : "i'm having problems with my high balance VA IRRRL's. All my other loans have come back into range but these are still 100 bps off, anyone else having the same problem?"

About the Author

A former originator, Matthew began writing for Mortgage News Daily in 2007, covering a wide range of topics. Seeing a need in the marketplace, his focus increasingly shifted toward relating MBS and broader financial markets for loan originators.
...
more

Founded in 2004, Mortgage News Daily has established itself as a leader in housing news, analysis and data. Our innovative social media platform combines industry leading content and data with an active community of industry professionals, to accomplish our primary goal - keeping our readers informed.